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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-K
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended: December 31, 2005 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES ACT OF 1934
 For the transition period from  to.
 Commission File Number: 333-118832-08
 SEQUOIA RESIDENTIAL FUNDING, INC. (as Depositor under the Pooling and Servicing Agreement, dated
April 1, 2005, providing for the issuance of the Sequoia Mortgage Trust 2005-3, Mortgage
Pass-Through Certificates)
 SEQUOIA RESIDENTIAL FUNDING, INC.
  Delaware
(State or other jurisdiction of incorporation or organization)
    
    35-2170972
(I.R.S. employer identification no.)
 One Belvedere PlaceSuite 330Mill Valley, CA
    
    94941(Address of principal executive offices)
    
    (Zip code)
 (415) 389-7373
 Securities registered pursuant to Section 12(b) of the Act:
    
    Securities registered pursuant to Section 12(g) of the Act:
 None
(Title of class)
    
    None
(Title of class)
 o þ
 o þ
 þ o
 þ
 o þ
  o o þ
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  Not Applicable
  Not Applicable




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PagePART I
    
    
    
    
    3ITEM 1 - BUSINESS
    
    
    3ITEM 1A - RISK FACTORS
    
    
    3ITEM 1B - UNRESOLVED STAFF COMMENTS
    
    
    3ITEM 2 - PROPERTIES
    
    
    3ITEM 3 - LEGAL PROCEEDINGS
    
    
    3ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF
SECURITY HOLDERS
    
    
    3PART II
    
    
    
    
    3ITEM 5 - MARKET FOR REGISTRANTS COMMON STOCK, RELATED STOCKHOLDER
MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
    
    
    3ITEM 6 - SELECTED FINANCIAL DATA
    
    
    3ITEM 7 - MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
    
    
    3ITEM 7A - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
    
    
    3ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
    
    
    4ITEM 9 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE
    
    
    4ITEM 9A  -  CONTROLS AND PROCEDURES
    
    
    4ITEM 9B - OTHER INFORMATION
    
    
    4PART III
    
    
    
    
    4ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS OF
THE REGISTRANT
    
    
    4ITEM 11 - EXECUTIVE COMPENSATION
    
    
    4ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
    
    
    4ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
    
    
    5ITEM 14 - PRINCIPAL ACCOUNTANT FEES AND SERVICES
    
    
    5PART IV
    
    
    
    
    5ITEM 15 - EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND
REPORTS ON FORM 8-K
    
    
    5SIGNATURES
    
    
    9CERTIFICATION
    
    
    10SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED PURSUANT TO
SECTION 15(d) OF THE ACT BY REGISTRANTS WHICH HAVE NOT REGISTERED SECURITIES
PURSUANT TO SECTION 12 OF THE ACT
    
    
    11INDEX TO EXHIBITS
    
    
    11EXHIBIT 31.1EXHIBIT 99.2EXHIBIT 99.5EXHIBIT 99.11EXHIBIT 99.12EXHIBIT 99.13EXHIBIT 99.14
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Class A-1
 Identification
    
    Principal Amount Owned
    
    Percentage of Outstanding AmountBANK OF NY
    
    $
    92,235,000
    
    
    
    26.38
    %JPMCBNA
    
    $
    62,175,000
    
    
    
    17.78
    %SSB-BK PFL
    
    $
    143,692,000
    
    
    
    41.09
    %SG AMERICA
    
    $
    25,000,000
    
    
    
    7.15
    %
 Class X-A
 Identification
    
    Principal Amount Owned
    
    Percentage of Outstanding AmountMERIL
    
    $
    349,687,000
    
    
    
    100.00
    %
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Class X-B
 Identification
    
    Principal Amount Owned
    
    Percentage of Outstanding AmountCITIBANK
    
    $
    9,495,000
    
    
    
    100.00
    %
 Class B-1
 Identification
    
    Principal Amount Owned
    
    Percentage of Outstanding AmountBANC OF AM
    
    $
    6,208,000
    
    
    
    100.00
    %
 Class B-2
 Identification
    
    Principal Amount Owned
    
    Percentage of Outstanding AmountMELLON TR
    
    $
    3,287,000
    
    
    
    100.00
    %
 Class B-3
 Identification
    
    Principal Amount Owned
    
    Percentage of Outstanding AmountLASALLE BK
    
    $
    2,374,000
    
    
    
    100.00
    %
 
   
   
  
  (a)
    
    The following documents are filed as part of this report:
 1.
    
    Financial Statements:Not applicable.2.
    
    Financial Statement Schedules:Not applicable.
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3.
    
    Exhibits:
 Exhibit No.
    
    Description31.1
    

    
    
    Sarbanes-Oxley Certification.99.1**
    

    
    
    Statement of Compliance of the Servicer pursuant to Section
7.04(a) of The Master Servicing Agreement between RWT Holdings, Inc.
(RWT) and Morgan Stanley Credit Corporation (formerly known as
Morgan Stanley Dean Witter Credit Corporation), dated August 1,
2002, as modified by the related Acknowledgements (the RWT/Morgan
Servicing Agreement).99.2
    

    
    
    Report of Independent Registered Public Accounting Firm pursuant
to Section 7.04(b) of the RWT/Morgan Servicing Agreement.99.3*
    

    
    
    Statement of Compliance of the Servicer
pursuant to Section 6.04 of The Mortgage Loan Flow Purchase, Sale
and Servicing Agreement, dated as of August 1, 2002, between RWT and
GreenPoint Mortgage Funding, Inc., as modified by the related
Acknowledgements (the RWT/GreenPoint Servicing Agreement).99.4*
    

    

    
    Report of Independent Account pursuant
to Section 6.05 of the RWT/GreenPoint Servicing Agreement.99.5
    

    
    
    Statement of Compliance of the Servicer
pursuant to Section 7.04 of The Mortgage Loan Flow Purchase, Sale &
Servicing Agreement among RWT, PHH Mortgage Corporation (formerly
Cendant Mortgage Corporation) (PHH) and Bishops Gate Residential
Mortgage Trust (formerly known as Cendant Residential Mortgage
Trust), as Sellers, and PHH, as Servicer, dated August 1, 2002, as
modified by the related Acknowledgements (the RWT/PHH Servicing
Agreement).99.6***
    

    
    
    Report of Independent Registered Public Accounting Firm pursuant
to Section 7.05 of the RWT/PHH Servicing Agreement.99.7***
    

    
    
    Statement of Compliance of the Servicer pursuant to Section 11.20
of the Flow Mortgage Loan Sale and Servicing Agreement, dated as of
April 1, 2003, between RWT and Bank of America, N.A., as modified by
the related Acknowledgements (the RWT/Bank of America Servicing
Agreement).99.8***
    

    
    
    Report of Independent Accountant pursuant to Section 11.21 of the
RWT/Bank of America Servicing Agreement.99.9*
    

    
    
    Statement of Compliance of the Servicer
pursuant to Section 6.04 of the Loan Servicing Agreement, dated as
of February 1, 2004 between RWT and GMAC Mortgage Corporation, as
modified by the related Acknowledgements (the RWT/GMAC Servicing
Agreement).99.10*
    

    
    
    Report of Independent Accountant pursuant to Section 6.05 of the
RWT/GMAC Servicing Agreement.99.11
    

    
    
    Statement of Compliance of the Servicer
pursuant to Section 3.14(a) of the Standard Terms and Provisions of
Sale and Servicing Agreement, dated as of June 1, 2004, between RWT
and Residential Funding Corporation, as modified by the related
Acknowledgements (the RWT/RFC Servicing Agreement).
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Exhibit No.
    
    Description99.12
    

    
    
    Report of Independent Accountant pursuant to Section 3.14(b) of the
RWT/RFC Servicing Agreement.99.13
    

    
    
    Statement of Compliance of the Servicer
pursuant to Section 6.04 of the Master Sellers Warranties and
Servicing Agreement, dated as of September 1, 2003, between Banc of
America Mortgage Capital Corporation and National City Mortgage Co.,
as modified by the amendments thereto and the Master Assignment
Assumption and Recognition Agreement and as modified by the related
Acknowledgements (the National City Servicing Agreement).99.14
    
    
    
    Report of Independent Accountant pursuant to Section 6.05 of the
National City Servicing Agreement.
 (b)
    
    Reports on Form 8-K field during the last quarter of the period covered by this report.
 DATE OF REPORTS ON FORM 8-K
    
    ITEMS REPORTED/FINANCIAL STATEMENTS FILEDApril 19, 2005
    
    Report filing Collateral Term SheetApril 28, 2005
    
    Report filing Computational MaterialsMay 11, 2005
    
    Report filing the Pooling and Servicing Agreement and the
Tax OpinionJune 8, 2005
    
    Trustees Monthly Report for the May Distribution to
CertificateholdersJuly 11, 2005
    
    Trustees Monthly Report for the June Distribution to
CertificateholdersAugust 8, 2005
    
    Trustees Monthly Report for the July Distribution to
CertificateholdersSeptember 6, 2005
    
    Trustees Monthly Report for the August Distribution to
CertificateholdersOctober 10, 2005
    
    Trustees Monthly Report for the September Distribution to
CertificateholdersNovember 14, 2005
    
    Trustees Monthly Report for the October Distribution to
CertificateholdersDecember 12, 2005
    
    Trustees Monthly Report for the November Distribution to
CertificateholdersDecember 27, 2005
    
    Trustees Monthly Report for the December 20, 2005
Distribution to CertificateholdersFebruary 10, 2006
    
    Trustees Monthly Report for the January Distribution to
Certificateholders
 
 *
    
    The document is not due to be delivered until March 31, 2006. Such document will be filed with
the Securities and Exchange Commission by amendment upon receipt by the Registrant. 7




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**
    
    The document is not due to be delivered until April 1, 2006. Such document will be filed with
the Securities and Exchange Commission by amendment upon receipt by the Registrant.***
    
    The document is not due to be delivered until April 15, 2006. Such document will be filed with
the Securities and Exchange Commission by amendment upon receipt by the Registrant. 8




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SEQUOIA RESIDENTIAL FUNDING, INC.By:
    
    /s/ Harold F. ZagunisName: Harold F. ZagunisTitle: Chief Financial Officer and Secretary
  9




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CERTIFICATION
         /s/ Harold F. Zagunis

SignatureName: Harold F. ZagunisTitle: Chief Financial Officer and Secretary
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Exhibit No.
    
    Description31.1
    
    Sarbanes-Oxley Certification.99.1**
    
    Statement of Compliance of the Servicer
pursuant to Section 7.04(a) of The Master
Servicing
Agreement between RWT Holdings, Inc. (RWT) and Morgan Stanley Credit
Corporation (formerly known as Morgan Stanley Dean Witter Credit Corporation),
dated August 1, 2002, as modified by the related Acknowledgements (the RWT/Morgan
Servicing Agreement).99.2
    
    Report of Independent Registered Public Accounting Firm pursuant to Section 7.04(b) of the
RWT/Morgan Servicing Agreement.99.3*
    
    Statement of Compliance of the Servicer pursuant to Section 6.04 of The Mortgage Loan Flow
Purchase, Sale and Servicing Agreement, dated as of August 1, 2002, between RWT and GreenPoint
Mortgage Funding, Inc., as modified by the related Acknowledgements (the RWT/GreenPoint
Servicing Agreement).99.4*
    
    Report of Independent Account pursuant to Section 6.05 of RWT/GreenPoint Servicing
Agreement.99.5
    
    Statement of Compliance of the Servicer pursuant to Section 7.04 of The Mortgage Loan Flow
Purchase, Sale & Servicing Agreement among RWT, PHH Mortgage Corporation (formerly Cendant
Mortgage Corporation) (PHH) and Bishops Gate Residential Mortgage Trust (formerly known as
Cendant Residential Mortgage Trust), as Sellers, and PHH, as Servicer, dated August 1, 2002,
as modified by the related Acknowledgements (the RWT/PHH Servicing Agreement).99.6***
    
    Report of Independent Registered Public Accounting Firm pursuant to Section 7.05 of the
RWT/PHH Servicing Agreement.99.7***
    
    Statement of Compliance of the Servicer pursuant to Section 11.20 of the Flow Mortgage Loan
Sale and Servicing Agreement, dated as of April 1, 2003, between RWT and Bank of America,
N.A., as modified by the related Acknowledgements (the RWT/Bank of America Servicing
Agreement).99.8***
    
    Report of Independent Accountant pursuant to Section 11.21 of the RWT/Bank of America
Servicing Agreement.99.9*
    
    Statement of Compliance of the Servicer pursuant to Section 6.04 of the Loan Servicing
Agreement, dated as of February 1, 2004, between RWT and GMAC Mortgage Corporation, as
modified by the related Acknowledgements (the RWT/GMAC Servicing Agreement).
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Exhibit No.
    
    Description99.10*
    
    Report of Independent Accountant pursuant to Section 6.05 of the
RWT/GMAC Servicing Agreement.99.11
    
    Statement of Compliance of the Servicer pursuant to Section 3.14(a) of the Standard Terms
and Provisions of Sale and Servicing Agreement, dated as of June 1, 2004, between RWT and
Residential Funding Corporation, as modified by the related Acknowledgements (the RWT/RFC
Servicing Agreement).99.12
    
    Report of Independent Accountant pursuant to Section 3.14(b) of the
RWT/RFC Servicing Agreement.99.13
    
    Statement of Compliance of the Servicer pursuant to Section 6.04 of the Master Sellers
Warranties and Servicing Agreement, dated as of September 1, 2003, between Banc of America
Mortgage Capital Corporation and National City Mortgage Co., as modified by the amendments
thereto and the Master Assignment Assumption and Recognition Agreement and as modified by the
related Acknowledgements (the National City Servicing Agreement).99.14
    
    Report of Independent Accountant pursuant to Section 6.05 of the National City Servicing
Agreement.
 
 *
    
    The document is not due to be delivered until March 31, 2006. Such document will be filed with
the Securities and Exchange Commission by amendment upon receipt by the Registrant.**
    
    The document is not due to be delivered until April 1, 2006. Such document will be filed with
the Securities and Exchange Commission by amendment upon receipt by the Registrant.***
    
    The document is not due to be delivered until April 15, 2006. Such document will be filed with
the Securities and Exchange Commission by amendment upon receipt by the Registrant. 12